Description: Congressional interest in the leadership change and economic transformation underway in China has grown substantially over the past few years. Leading congressional concerns focus on how economic conditions in China pose opportunities for U.S. enterprise and how the evolution of conditions in China fosters U.S. security, economic, and political interests. Congressional concern with China grew in 1995 and 1996 as a result of reports of the serious decline in the health of senior Chinese leader Deng Xiaoping. Present conditions in China include; A vibrant but sometimes overheated economy, A less divided central political leadership.

Description: This report discusses possible outcomes and implications for U.S. interests vary. For example, increasingly effective political administration and reform with continued successful economic modernization would be generally compatible with U.S. interests in greater economic opportunity, foreign policy cooperation, and political liberalization in China. Alternatively, Chinese administration, economic vitality, and internal cohesion could degenerate, limiting U.S. economic opportunities, challenging U.S. interests in stability in East Asia, but also diminishing potential threats from a strong China. Finally, China could develop formidable economic power while retaining authoritarian political control, with China emerging as a world power less interested in accommodating U.S. interests than in opposing them.